Retirement Planning

Stages of Preparing for Retirement

1. 5 Years

   Plan for your lifestyle

   • What do you want your life to be like in retirement?
   • Will you continue to work and live your current lifestyle?
   • Do you plan to travel and live on a fixed income?

   Choose your retirement date

   • At what age will you retire?
   • Do you want to retire early?
   • Remember, depending on your age your full retirement benefits could be available to you at age 65 or 67.

   Familiarize and assess the financial risks of retirement. Here are the top five financial risks that can impact your retirement and consider which risks you may be susceptible to:

   1. A longer lifespan requires savings to last longer;
   2. Inflation’s effect on the future purchasing power of today’s dollars;
   3. An overly conservative asset allocation that may put you at risk for not being able to outpace inflation;
   4. A withdrawal rate that depletes assets too quickly;
   5. Rising health-care expenses;

   Determine potential gaps in your savings strategy by estimating your income and expenses according to the number of years you expect to live off your savings, or catch up on savings by investing the maximum before leaving the workplace (TFSA, RRSPs, etc.).

   Ask yourself

   • Do you need to make home improvements?
   • Does your vehicle need replacing? Will you move?
   • Will you be debt free?
   • What medical services are available?
   • How will you spend your time?
   • What recreational facilities are available?
   • Will you travel or be a snow bird?

2. 3-5 Years

   What to start doing

   • Gather your retirement information and become knowledgeable about the fundamentals of retirement.
     Learn the retirement process. Familiarize yourself with the general process of transitioning into retirement.
   • Learn the key components of a successful retirement income plan (e.g., budget, asset allocation strategy, withdrawal strategy) and what makes them successful.
   • Access all resources available that provide you with support and guidance. Look to your employer and union as a source of information. Your employer may have income planning and retirement guides. HSAA offers workshops on retirement planning for members on a regular basis. Check out the “events” section of the HSAA website for dates and locations.
   • What are your retirement benefits? You will need to know which benefits you will continue to receive in retirement. Make sure you are aware of any changes or reductions in coverage.
   • If you have a spouse, factor in their benefits too (although consider whether or not you and your spouse will be staggering your retirement or retiring together).
   • As a health-care professional you should already know to plan for a healthy retirement. Not all health concerns are covered by Alberta health care — make sure you are planning and saving for those possibilities.
   • Will you need health coverage between your retirement date and when you are eligible for your retirement benefits? Find out the cost of coverage for that time.
   • Figure out when is the optimal age to begin taking payments. The longer you wait the larger your payments will be. If you are going to retire early, find out what the financial repercussions will be.

3. 1 Year

   What to start doing

   • Attend another retirement planning session to be knowledgeable about what has changed.
   • It is around this time you will want to review and perhaps make changes to your personal retirement plan to optimize it. Revisit your budgets and retirement time frames.
   • Become detail-focussed on the benefits and decisions you need to make – including your payout options. Some decisions (payment amounts) cannot be changed after retirement.
   • Learn about how Old Age Security Pension works, the benefits due to you and the steps you need to take to activate your payments upon retirement.
   • Create a budget plan that includes estimated expenses. This plan will determine your lifestyle so be sure to include inflation costs so there are no unpleasant surprises.
   • If your retirement lifestyle looks like it will cost more than you expected, you might consider working part time or putting off your retirement until you’ve reached your goals.
   • If you have a spouse, know what the survivor benefits would be in the event he or she passes.
   • Know when you can withdraw money from your retirement accounts without penalty.
   • Make long term care more than just a passing consideration— take a look at long-term-care insurance.
   • Revisit whether your employer/union offers any retiree benefits.
   • Find out when you should apply for OAS, CPP and your pension.
   • Find out if you will need your own health plan and what the costs will be.

4. 6 Months

   What to start doing

   • Live your retirement life for at least six months while you are still working and determine whether things need to change. It is a good opportunity to make little changes before your retirement date.
   • Automate your retirement income accounts and deposits. Automate as many financial transactions as possible such as insurance payments and other bills.
   • Eliminate any unnecessary expenses (do you need two cars, etc.).
   • Fill out all government and workplace paperwork before your retire. This will help avoid any wait times for your retirement income flow.
   • Finalize any retirement account payout options and activate any transitional health-care coverage.

5. Retirement

   Retirement Planning Lists

   • Banking institutions, type of accounts, safety deposit box(es), etc..
   • Bank cards, Visa, Mastercard, American Express, store cards, etc. (include numbers, pins, expiry dates and passwords).
   • Loans – institutions and contact names/numbers. Insurance – car insurance, life insurance, house insurance, policy numbers, agent names and contact info.
   • RSPs, Pensions, OAS, CPP – numbers, providers, contact info, social insurance numbers.
   • Memberships – Costco, AMA, Aeroplan, Airmiles, etc. – contact info, passwords, numbers, etc..
   • Health insurance – Alberta Health Care, private health insurance, contact names, numbers and info.
   • Drivers license – number and information.
   • Health provider contact information – doctors, dentists, nurses, aids, etc. and all contact information.
   • Wills, personal directive, enduring power – location and contact information for each.
   • Preplanned funeral – company, contact info, your requests, music, photos, etc..
   • Who to contact in the event of your death – names and contact information.